In the current world where cash is no longer necessary and time is money, online banks are quickly replacing traditional brick and mortar banks[i]. This blends perfectly well with students and young adults who are generally more tech savvy than previous generations. In fact, these 4 online banks offer generous benefits, along with some of the advantages that come with digital banks!
Why is an online account a better option than a physical bank?
There are several advantages of owning an online bank account as opposed to using traditional physical banks[ii]. Some of the benefits include:
- Time saved – you will not need to visit a bank in-person to perform financial transactions
- Online banks are easy to open and operate
- Using an online bank is a lot more convenient – you can perform transactions from wherever you are
- It eliminates the need to keep transaction receipts as they can be accessed online
- With online banks, there are no downtime moments – you can perform transactions during the night, during holidays, or weekends.
- Online banking is speedy and efficient
- Easy to detect fraudulent activity on your account – you can monitor your bank transactions and balances at any time
More Advantages to Opening Bank Accounts Online
Learning about money and managing one’s finances from a young age makes a big difference for youth in the long run. It helps teens develop a better appreciation of their financial capacities while they are still young. It empowers them to make difficult choices that boost their long-term financial welfare objectives. Below are some of the benefits that come with teenagers opening bank accounts[iii].
Independence
Teens usually desire to “grow up fast”, and in opening their bank account, they become entrusted to manage their finances on their own. It brings an end to pleading and begging for money, especially for teens who have a part-time job.
Saving for a not-so-rainy day
Willpower is not necessarily something we all have, but it can do a lot of good in the long-run. Everyone wishes they had more money in their accounts. This is possible through a committed savings plan – saving some amount over time can lead to great rewards at a later date. Teens who are able to develop self-discipline when it comes to saving will learn treasurable saving and spending habits alongside financial responsibility. Valuable saving habits will pay off in later years, stretching to retirement.
Learning Financial Literacy
Not everyone has the advantage of growing up in a family where financial matters are openly discussed; so, when young adults have their own money, they seem to take things more seriously. Other than being able to sort out their bills, teens can learn how to create a scenario where money works for them. They will end up creating a deep banking relationship with their financial institution and this will instill financial literacy.
A Sense of Importance
Opening a bank account gives teens a feeling of importance. Whenever they are carrying out bank transactions, it makes them feel like they are conducting “real” business.
Best Online Banks in the US
If you are a young student in the US, you should consider doing away with bank branches, and consider switching to online banking. These banks listed below offer the best options for you[iv].
1) Ally Bank
This bank started as GMAC, a branch of General Motors, in 1919. They offer several financial products including credit cards, deposit accounts, home financing, auto loans, and online brokerage services.
Their banking products include money market, interest checking, CDs, savings, and cashback credit card.
Benefits:
- No monthly fees for savings
- $25 overdraft
- No fees for CDs
- 43,000 all point ATMs
2) American Express National Bank
This bank started as an express mail service in 1850 in New York.
Its financial products include airline miles, membership rewards, savings accounts, personal loans, credit cards with cashback, hotel points, CDs, and foreign exchange
Banking products: High-yield CDs and savings accounts.
Benefits:
- No monthly fees
- No minimum balance requirements
3) Capital One
This bank acquired one of the first internet-only banks in the US, ING Direct, in 2012.
Banking products include CDs, checking, and savings
Benefits:
- No monthly fees
- 39,000 ATMs
4) Chime
Mobile banking app Chime offers online-only banking services for the digital generation. It is famous for electronic deposits and payments through innovative automated savings.
Banking products include savings and spending accounts
Benefits:
- No monthly fees
- Over 38,000 fee-free Visa Plus and MoneyPass ATMs
- 38,000 cashback locations at major merchants
Final Thoughts
As a young professional, several benefits come with having a bank account. With the current global trends, it would be best if you opened an online banking account that suits your needs. The best thing about online banks is that you will be able to open your account in a matter of minutes. Besides, online banking accounts come with many other benefits compared to traditional physical banks, as discussed in this article. There are, however, very many options to choose from, and settling on one may seem a challenging task. This guide looks at four of the best options out there to help you narrow down your options.
References
[i] Ashford, K. (2020, September 03). Best Online Banks Of 2020–And How To Choose One. Retrieved September 03, 2020, from https://www.forbes.com/advisor/banking/best-online-banks/
[ii] Rosenberg, E. (2020, February 14). How to decide if an online-only bank is right for you. Retrieved September 03, 2020, from https://www.businessinsider.com/personal-finance/what-is-difference-between-online-banks-traditional-banks?IR=T
[iii] 5 Benefits of Teen Savings and Checking Accounts. (n.d.). Retrieved September 03, 2020, from https://www.rivermarkcu.org/youth/resources/benefits-of-teen-savings-checking
[iv] Pritchard, J. (n.d.). Best Online Banks. Retrieved September 03, 2020, from https://www.thebalance.com/best-online-banks-4165693
